In a move to stoke demand, Tesla cuts prices in China by upto 9%

Tesla lowered prices across its lineup in China, looking to stoke demand in a market where competitive and economic pressures are intensifying. The carmaker cut the cost of the cheapest locally built Model 3 sedan by 5 per cent to 265,900 yuan ($36,774), Tesla’s website showed Monday. The company dropped the starting price of the Model Y SUV by 8.8 per cent to 288,900 yuan. 

The changes reflect the tougher time Tesla and its international peers are having going up against local manufacturers led by BYD , which sold a record 200,973 vehicles last month, and upstarts including Nio Inc. and Xpeng Inc., which are expanding their lineups. Domestic automakers accounted for almost 80 per cent of electric-vehicle sales through the first seven months of the year, according to China’s Passenger Car Association. Chief Executive Officer Elon Musk also flagged last week that demand has been “a little harder” to come by due to China’s property market slowdown and Europe’s energy crisis. He said during Tesla’s earnings call that while prices of some commodities have eased, inputs for EVs including battery-grade lithium are still “crazy expensive.”

Tesla shares slumped as much as 4.1% before the start of regular trading and were down 2.3% to $209.43 shortly after 8 a.m. New York time. The stock has declined 39% this year.